TMI Blog2019 (2) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... Later on the SBI also came out with an Initial Public Offer (IPO) and allotted its shares to various shareholders including individuals. As perused the Share Transfer Form submitted by the 1st respondent to 2nd appellant for transfer of shares. The said Share Transfer Form is prescribed under Section 108(1A) of the Companies Act, 1956. The said transfer from is being accepted by the 1st appellant. 1st appellant has not submitted any such form which have been prescribed by it for the purpose of transfer. 1st appellant is using the said form which have been prescribed under the Companies Act. As such the argument of the 1st appellant that the Companies Act is not applicable to them is not convincing. On the contrary State Bank of India being a body created by an Act of Parliament it has higher responsibility than the ordinary company to take care of its all stake holders. Thus State Bank of India is a company within the meaning of Companies Act for the purpose of transfer of securities. Therefore, NCLT has the jurisdiction to entertain or try the disputes pertaining to transfer of equity shares. Since we have held that the NCLT has the jurisdiction to entertain or try the disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Company Law Tribunal, Mumbai Bench, Mumbai in Company Application No.13/584(4) and 59/CLB/MB/MAH/2015 passed under Section 58(4) and 59 of Companies Act,2013. 2. The brief facts of the case are that 1st respondent, being a share broker, purchased the following 200 shares of the appellant through Ahmedabad Stock Exchange of 50 denominations and submitted the same to 2nd appellant to transfer the said shares in his name. Name of Seller Folio No Certificate No. Distinctive No 1 Rukhmaniben Babulal SB2541954 1634923 333094801 to 33094850 2 Urvi B Shah SB2549950 1643232 333510251 to 333510300 3 Jolly Champaklal Shah SB1797766 871509 294924101 to 294924150 4 Kamlesh Bhuderji Thakker SB1329225 386109 270654101 to 270654150 3. The original transfer deeds pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that only 100 shares were lodged before State Bank of India to record the Transfer and not 200 shares. In the absence of any evidence that rest of the 100 shares have also been lodged for transfer in SBI record we are not inclined to pass any order. Definitely it is not permissible under law to adjudicate on an issue which has not been raised by proper lodgement. At the cost of repetition, the correspondence placed before us has demonstrated only in respect of 100 shares, the distinctive numbers etc already made clear in this judgement. Even in the reply filed by Datamatics Financial Services (R-2) vide para 6 it is acknowledged that only 100 shares share certificates were lodged and put a Stop Mark and not for rest of the shares. Para 6 is reproduced below: 6 With reference to para 8 of the petition, it is respectfully submitted that the Petitioner had lodged only two certificates (i.e. 100 shares) i) share Certificate No.1634923 bearing distinctive Nos 33094801 to 33094850 in the year 2002 and ii) share certificate No.386109 bearing distinctive Nos.270654101 to 270654150 in the year 2011 for transfer in his name, but because the transferor s signature in the relevant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct Note/Purchase Bill mentioning therein the details of SEBI registration and name of broker to whom he has purchased the shares and in the meanwhile put provisional Stop Mark in their records. However, 1st respondent has not resubmitted the said documents after rectification of the discrepancies. 8. 1st appellant further submitted that the 1st respondent filed a Civil Suit No.1173/2007 in the City Civil Court, Ahmedabad and thereafter preferred a Company Petition before the then Company Law Board in March, 2015 under Section 58(4) and 59 of the Companies Act, 2013. 1st appellant stated that the 2nd appellant filed its reply in the said Company Petition and raised preliminary objections with regard to maintainability/jurisdiction and limitation. 9. 1st appellant raised the issue that the 1st appellant is not a Company registered under the provisions of Companies Act, 2013 and it is a body corporate constituted and incorporated under State Bank of India Act, 1955 which was enacted before the enactment of Companies Act, 1956 and, therefore, the NCLT would have no jurisdiction to entertain or try the disputes pertaining to transfer of equity shares issued by State Bank of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he SBI Act also refers and prescribes the provisions of Companies Act in respect of Transfer of unpaid or unclaimed dividend. 1st Respondent stated that SBI Act itself follows the provisions of Companies Act. 16. 1st respondent stated that he has withdrawn the Civil Suit filed by him for share certificate No.1634923 under Folio No.2541954 for 50 shares and no suit is pending (Page 3 of Reply of 1st respondent). 17. 1st respondent, in reply to order dated 3.5.2007 passed by the erstwhile Company Law Board in the case of Tirupati Trade Communications Vs SBI, stated that Companies Act, 1956 is repealed by the Companies Act, 2013 wherein Section 1(4) of the Companies Act, 2013 makes it very clear that the provisions of this Act shall apply to (c) banking companies, except in so far as the said provisions are inconsistent with the provisions of the Banking Regulations Act, 1949. 1st respondent further stated that the inferior courts are bound to apply the legal principles set down by superior courts in earlier cases, while a persuasive precedent is one which is not absolutely binding on a count by which may be applied. 18. 1st respondent submitted that the Tribunal has jurisdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the 2nd appellant. But before this Appellate Tribunal 1st appellant has come in appeal and the 2nd appellant has not filed reply. Further we have faced great difficulty as proper pagination was not done by the appellant while filing the appeal. For example, Two pages of page No.21 have been filed in which Declaration by appellant and Verification by Sanjeev Kumar Gaur has been filed. Further on the Index, Annexure -1 and Annxure-2, copy of authorisation letters have been shown at Page no.42 and 43. However, in the appeal at Page 2, it is shown at Page No.39-40. Similarly on the Index, Annexure -3 is shown at Pages 44-52 and in the appeal at Page No.8, Annexure -3 is shown at Pages 41-49. Similar mistakes have been committed in the Annexures also. Therefore, we find that the appeal has been filed in a casual manner. 24. Now we come to the main issue which is the core issue raised by the 1st appellant that State Bank of India is not a Company registered under the provisions of Companies Act and it is a body corporate constituted and incorporated under SBI Act, 1955 which was enacted before the enactment of Companies Act, 1956 and, therefore, NCLT would have no jurisdiction to en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Companies Act, 1956. The said transfer from is being accepted by the 1st appellant. 1st appellant has not submitted any such form which have been prescribed by it for the purpose of transfer. We observe that the 1st appellant is using the said form which have been prescribed under the Companies Act. As such the argument of the 1st appellant that the Companies Act is not applicable to them is not convincing. On the contrary State Bank of India being a body created by an Act of Parliament it has higher responsibility than the ordinary company to take care of its all stake holders. We are, therefore, of the view that the State Bank of India is a company within the meaning of Companies Act for the purpose of transfer of securities. Therefore, NCLT has the jurisdiction to entertain or try the disputes pertaining to transfer of equity shares. 27. The other issue raised by the appellant that when the petition before the NCLT is not maintainable then the provision of Section 430 would not be applicable. 28. 1st respondent argued that the NCLT has jurisdiction to entertain petition as per section 430 of the Act. 29. Section 430 of the Act is as under: 430. Civil Court not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kamlesh Bhuderji Thakker SB1329225 386109 270654101 to 270654150 32. We have heard the learned counsel for the parties on this issue. It is not disputed that the 1st respondent purchased the shares from Stock Exchange and the physical shares are in his possession. 1st respondent while filing petition before the NCLT made the transferor of shares as party respondent but they did not come forward to file their reply, except Respondent No.4, or to agitate that they have not signed transfer deeds. Now when the 1st appellant filed the appeal before this Appellate Tribunal, 1st appellant have also made them parties respondent to the appeal. They have not come forward to agitate the Appeal inspite of service of Notice. It goes to prove that the transferor is not cooperating with the transferee or showing his inability to provide the information to the transferee. Therefore, it is established on the record that the 1st respondent was rightly contesting and claim that he is the rightful owner of these shares by filing Civil Suit and Company Petition before the appropriate Court/Tribunal. Now the question arises that the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curities Exchange Board of India is provided under Section 24 of the Companies Act, 2013. Section 24 of the Companies Act,2013 which states as under: 24(1) The provisions contained in this Chapter, Chaptr IV and in Section 127 shall- (a) in so far as they relate to--- (i) issue and transfer of securities; and (ii) non-payment of dividend by listed companies or those companies which intend to get their securities listed on any recognised stock exchange in India, except as provided under this Act, be administered by the Securities and Exchange Board by making regulations in this behalf; Thus it is noted that the combined reading of Section 24 of Companies Act and Regulation 40 of SEBI will show that the principles and compliances to be made under the Companies Act or under the SEBI are complementary in nature and both provisions have to be complied with for a better outcome. 33. Now, the relevant part of the said circular No.SEBI/HO/MIRSD/DOS3/CIR/P/2018/139 dated 6th November, 2018 on mismatch of signature is as under: c. Major mismatch/Non-availability of transferor s signature: As per procedure laid down in LODR, in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Transfer shall be effected only after the expiry of 30 days from the newspaper advertisement. The securities so transferred shall bear a stamp affixed by the company/RTA stating that these securities shall be under lock-in for a period of 6 months from the date of registration of transfer and should not be transferred/dematerialized during the said period. 5. Names of the transferor, transferee and no. of securities transferred under this procedure shall be disclosed on the company s website for a period of 6 months from the date of transfer. This information shall also be displayed on stock exchange website as a corporate announcement. d. In case of non-availability of any document required for transfer and the transferor is not cooperating or not traceable, companies/RTA shall register the transfer by following the procedure as specified in case of major mismatch/non-availability of transferor s signature, as specified in Para 2(c) above. 34. We have noted that the matter under consideration has been hanging over for the last several years. NCLT vide Impugned Order partly disallowed the claim of Respondent No.1, original petitioner, and he has not filed appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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